Energy and Commerce Committee Talks Bitcoin in Congressional Hearing

The US House Subcommittee on Commerce, Manufacturing and Trade held a meeting on digital currencies and blockchain technology today, exploring the technology's characteristics as well as its regulatory and legislative implications.

Opening statements largely focused on the fundamentals of bitcoin and the blockchain, offering a look at the current makeup of the startup ecosystem as well as a take on the existing regulatory environment.

Overall, the hearing had an introductory tone, as it is meant to serve as part of a series on technology disruption that in the past few months has also featured mobile payments, 3-D printing and drones.

Representative Michael Burgess, chairman of the subcommittee, cast a wide net in his opening, remarking on how some state legislatures have moved in the past year to cement their own regulatory approaches to the technology and consider how the technology could be applied to government itself.

Burgess stated:

"We will hear about what consumers can do today with digital currency, we're also hear about consumer protections. Even more exciting is the potential for consumer benefits to be realized by firms that utilize the blockchain."

The US House Subcommittee on Commerce, Manufacturing and Trade is part of the Energy and Commerce Committee.

Range of questions

Indeed, many of the questions echoed those brought up in legislative hearings on digital currencies in the past, such as the question of privacy and anonymity on the bitcoin blockchain, perceptions that digital currencies are being used to finance terrorism, and the often-discussed volatility in bitcoin markets.

On the last point, Roszak argued – and others concurred – that the bitcoin market is still in its early stages, and as a result is subject to the forces of supply and demand as well as significant speculation.

"We’re at the front end of this," he said.

Consumer protection was also a notable subject during the hearing, with Illinois Rep. Janice Schakowsky asking whether bitcoin users can try to reverse a transaction after buying a defective product.

This sparked Syracuse, who previously worked for the New York State Department of Financial Services (NYDFS), the architects of the New York BitLicense, to cite that regulatory framework as an example of the kinds of consumer protection mechanisms that can be put in place.

"Under the BitLicense, there are certain enumerated disclosures that need to be made. Disclosures about volatility, disclosures about the irreversibility of a transaction, they have to be made," he said.

The meeting concluded with Burgess asking panel members about potential use cases, with micropayments, smart insurance contracts and distributed forms of corporate governance being offered as possible future applications.

Burgess, who at times tried to strike a light-hearted tone during the hearing, closed with a joke:

"When we had the drones hearing, we had drones here. I was so looking forward to finding out who's face was on the bitcoin, and I still don’t know, even after the end of this hearing."